Hospital deal still stuck in waiting room

HOT SPRINGS  The time limit for a purchase agreement for Capella Healthcare to buy Mercy Hospital Hot Springs (formerly St. Joseph’s Mercy Medical Center) from Mercy Health Systems expires at the end of February, and while both parties have plans to extend the sales option, the deal has had a few bumps along the way.

There has been no announcement from either health care company about a renewal of the agreement, but on Jan. 21, Kim Day, interim president of Mercy Hospital, said “the commitment by Mercy and Capella is still extremely strong.”

The expected date of completing the transaction has been “a few weeks away” since the summer, after the proposed merger was announced in April.

Most recently, the Federal Trade Commission has issued at least one subpoena with questions about the merger. While the new actions do not imply any wrongdoing, the

request for additional information could delay the process.

“The FTC has come back and requested a second round of information,” Day said.

He said responses were expected to be returned to the FTC by Thursday.

“Then it will be back in their court to respond back to us,” Day said.

The intent for Capella, the owner of National Park Medical Center in Hot Springs, to purchase Mercy’s Hot Springs hospital has been questioned.

Within a week after the merger proposal was announced, Eric Jackson, general manager of Oaklawn Park, resigned from the national board of directors for Mercy.

At the time he said “a faith-based, not-for-profit hospital is best for Hot Springs.”

In addition, Bishop Anthony Taylor of the Catholic Diocese of Little Rock announced that the deal lacked his support. In a statement released after the first announcement of the merger, the bishop expressed “serious reservations” about the plan and complained that he played no role in the talks that led to the agreement.

Mercy’s Hot Springs hospital was founded by a religious order, the Sisters of Mercy, in 1888. In 1996, the order created the Mercy Health System to manage 26 hospitals in four states.

Approval of the sale includes input from church officials at the Vatican, who said they wanted Mercy to “explore other possibilities,” including selling the hospital to another Catholic institution, according to a statement issued Dec. 7 by the Diocese of Little Rock.

According to comments from John Mabry, president of Capella’s Arkansas Market Options who also oversees National Park Medical Center, both hospitals would remain open when the merger is completed. Mabry said the agreement would allow both hospitals to operate under one management.

Staff writer Wayne Bryan can be reached at (501) 244-4460 or wbryan@arkansasonline.com.